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The nation's civil aviation authorities have allowed domestic airlines to raise economy fares for domestic routes starting on Monday to offset the impact of jet fuel price hikes.

First-class and business fares should be set at 150 per cent and 130 per cent, respectively, of economy class prices, according to a notice released on Friday by the General Administration of Civil Aviation of China (CAAC), the watchdog of the industry in China.

Children and baby's fares will be set at 50 per cent and 10 per cent of the adjusted price, the notice said.

Chinese mainland airlines are now allowed to raise fuel surcharge by no more than 14 per cent on the base fares set on October 31, 2000.

The increase in the fuel surcharge is needed to compensate for the extra operational costs airlines are facing in the wake of rising international oil prices. The money gained from the fuel surcharge will be distributed to domestic airlines. Passengers who book and pay for a ticket before Monday will not be hit with the extra charge but all others can expect to pay more, according to sources.

A normal air ticket from Beijing to Shanghai now costs 1,000 yuan (US$121). It will go up 30 yuan (US$3.60) from Monday.

China added a 15 per cent fuel surcharge on tickets in late 2000 as a measure to ease the mounting pressure on airlines. CAAC reduced the surcharge to 8 per cent earlier in 2002 as international fuel prices moved downwards.

Air China, one of the country's major airlines, is working out their plans for the price rise, sources from the airline corporation said.

The rise in fuel surcharges will affect international travel, since fares will be raised on some overseas routes, according to an official with the China International Tourist Service, who asked to remain anonymous.

Fares for European and Australian routes will go up significantly, while those for Japanese and South Korean routes are likely to remain at last year's levels, he said.

Fuel surcharges cover 20 per cent of mainland carriers' operating costs, according to analysts.

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